It means you’ve trained and verified what they do know so they can be entrusted to do the tasks assigned to them at their spot on your Organizational Chart.

In other words, you don’t have to keep mopping up they’ve made costly mistakes!

Getting your employees to “Released” is a lovely place to be. And it’s what all my clients strive to reach when we first begin our work. Know that it’s a never-ending process and the work is never fully done. But here’s the good news, the more you do the right way in this process the more things go better for your customers, your company and yourself.

There are 5 steps in the Staffing Power! process I teach and they are:

1. Recruiting: The better you do at attracting the “right stuff” willing type of potential employees the better the result will be. The right way to look at recruiting is that it’s just like marketing except instead of trying to attract the right type of prospective customers you’re seeking to attract the right type of prospective employees to make your company stronger
2. Hiring: This is typically the interview and testing phase of your candidates. Here’s where you try to find out what their strengths and weaknesses are and whether or not they’re they possess willingness. Your ability to hire on willingness vs. skills is directly proportionate to your ability to provide the skills training they will need.

   Note: Your best employees are typically the ones you build from scratch the right way vs. trying to rewire potentially high skills people with a bad attitude.

3. Orienting: This is where you ensure that they get off to the best start possible with your company. You ability to orient them the right way is also proportionate to the documented and repeatable systems you have in place and your investment of time and effort in them.
4. Training: This is what can make you’re the “Employer of Choice” because this is where you can offer “A Career not Just a Job.” To make that a reality, you must be able to provide all the training they need to move up the boxes on your Organizational Chart and be successful at whatever they’re doing at your company today and tomorrow.
5. Retaining: This last step is often the most overlooked. It means you don’t neglect the members of your team after they’ve been onboard for awhile. Instead, you bond with them by finding them doing good work and rewarding them whether it’s a compliment and/or compensation. You must continue to invest in their future by creating a never-ending training process that allows them to advance to ever higher and higher levels with your company vs. jumping ship because they feel stuck.

Okay, here some more on what it takes to get an employee to “released”:

1. Someone in the Accounts Receivable, Accounts Payable, Credit Departments need to do the following to teach and verify what the new employee can do:
   1. The trainer says and does this, “I’ll do this task in the manual and you watch and read the manual out loud and let me know if there are any questions”
   2. The trainer then says and does, “Okay, now it’s your turn. You sit here and do it and I’ll watch you do it”
   3. The trainer then says and does, “Alright, you enter this invoice [as an example] and I’ll come back and see how you did”

   The trainer can initial the procedures signed off on a copy of the Table of Contents of the Manuals and keep track of progress

   Note: The process is pretty much the same for Customer Service Representatives and Dispatchers but in addition to the reading of the manual there needs to be a lot of phone –role plays and recording of calls

2. Apprentices get your Employer-Employee Manual and a dedicated Apprentice Manual that directly addresses what they must do in this position and how they can advance their careers with the company.  It goes super fast to read through these policies and procedures together.

   Note: Remember, what you wrote in the manuals and what they think it means are two very different things. Think of all the times you’ve misinterpreted email communications.

3. Techs need to have a structured 5 to 10 day orientation process. That means beside your stock Employer-Employee Manual they must have a trade manual that addresses the types of tasks your company does and that they’d be expected to perform.

   Note: If you’ve committed to building a training center, you can setup problems and expose what they do and don’t know in a safer environment and then go about filling in these holes.

Do this and experience for yourself the power of having a company filled of employees who are released!

Pretty frank, don’t you agree?

At first, I was a little annoyed. That’s because I felt I had been proving myself worthy for years. After all, I had been working in the business since I was old enough to dump waste paper baskets and push a broom all for a free lunch and $10 spending money.  I had been working in the business at all different levels throughout high school and college. There was no time off when I wasn’t in school and I have nothing but gratitude for the education and opportunity I was given.

Still, as my dad insisted, I had to earn my place at the table.

The reason is my dad didn’t feel it was fair to my other brothers and to the staff for me to get special treatment or to conduct myself in a way that would be detrimental to the long-term health of the company. My dad took his stewardship seriously and he felt that he owed it to all to keep the team strong.

You and your company may be facing the natural transition in family businesses of bringing on board a younger family member to join your team. How they join the team makes all the difference in either ensuring a successful transition to the next generation or the sowing of the seeds of destruction and a family legacy. It’s rarely anything in between these extremes.

What makes me qualified to talk about the good and bad of nepotism?

Well, I was the third generation in the business and now my nephew is on board as the fourth generation working side by side with my brothers as they transition the shop. The systems and structure we put in place has made this possible.

I also have been coaching a lot of owners I work with on how to bring new family members into the business the right way so they too can avoid the pitfalls.

So, let’s start with how things can be done the wrong way?:

1. You let them skip over the bottom levels of your org chart and demoralize team members who felt they had earned their way to the top. Plus, you put the family member in a position to fail. This causes them damage by placing them early on in a position to fail. Longer-term it costs your company dearly.
2. By pushing them into leadership roles without them having demonstrated that they can follow and be lead. They need to master the basics of the jobs they will ultimately be supervising to be better at leading.
3. You treat them differently in allowing them to break the policies and procedures you expect everyone else at the company to follow. People pay attention to double standards and it crushes unity.
4. By giving them a free pass on being held accountable for their actions or inactions.
5. By not having an Org Chart in place so they can see where they are today and where they can earn their way to in the future. They assume they are in charge when they aren’t [at least shouldn’t be right out of the gate]
6. Because you didn’t spell out objectively what they get paid today and how they can earn future pay increases.
7. By not creating a proper set of expectations that are based on measurable things
8. Because you let them run rough shod over the chain of command and thereby you have allowed the authority of those who already have earned their place at your company to be compromised

So, how do you do it the right way?: 

1. Share with them what my dad shared with me, “I owe you and opportunity and not a guarantee”
2. Create an Org Chart with all the boxes it takes to run your company and then share where they will be starting today, what they must demonstrate, and where they can earn their way to in the future by performance
3. Match the Org Chart discussion with how they will be paid today and how they can move up the salary ladder
4. Explain how and when they can earn an equity stake in the company
5. Share how you are going to be providing special coaching to help them up the learning curve for each step they move and then make good on your promise
6. Setup the necessary outside training you will need to provide constant improvement to their skills for each level they will occupy
7. Ask them how they see themselves fitting in and try to find a way to weave it into the path your creating
8. Ask them what their goals are for the next year and share with them on how this can be made to happen whenever possible
9. Ask them where they want to be in 3 to 5 years from now and put a long-term business plan together that helps them achieve their goals as long as they also benefit the company too.
10. And if you can’t be objective enough to judge them [that means you’re either too easy or too hard on them] setup an independent committee of either high level staff or outside experts to monitor their performance.

    Note: If it’s inside people, their input must remain confidential to avoid future reprisals.

I find it personally very gratifying to help a company welcome a new family member into the business and make that person successful. It’s good for them and it’s good for their company and I love beating the odds.

Do the right things and avoid the pitfalls and watch your company springboard into the future with your business in trusty hands!

The most common answers to what they want in 3 to 5 years is to fix their business, grow their business or sell their business. Many want to be in the position to do a combination of things like fix it, grow it and sell it.

Many express the desire to retire right now by selling the business and doing something else.

I let them know that I understand the feeling of why they would entertain the notion about selling and retiring especially when we’ve spent 30 minutes talking about their daily challenges.

With a little question and answer, it’s also easy to see how stressed many of the contractors I speak to are. The business has often left them feeling drained to downright beaten up. Some contractors have been lucky enough to have made money and grown the business but what it takes emotionally to keep it all going has become exhausting and that’s the reason they called. They want to regain their sanity. And some have dug themselves a deep financial hole.

Some people are legitimately reaching the age of retirement and there is no heir apparent so they wish to capitalize on their blood, sweat and tears and plan for their well-deserved golden years in a logical manner.

But, many of the contractors I speak to are ages 35 to 55 and the real reason they are seeking to get out is they are burnt out. They don’t even know what they’d do if they didn’t have contracting work in their life but they do know how much they want it to all end.

I do share that if they work on their business the right way they may find they don’t want to really sell the business after all. That’s because with good systems in place and the right type of culture it actually becomes fun to go to work again.

But to make this happen, they must be committed to implementing the changes required to make their business function without their having to be overly involved in every little thing and that’s not easy to do for us micro managers to accept.

The good news is many 35 to 55 year old owners have found that when they did the work to take control of their company they ended up where they didn’t want to sell and/or retire. They actually were having fun growing and running their business.  And some have found that they now had a much more valuable company to sell. That’s incredibly rewarding when it happens.

How about you? Have you decided to fix your business, to grow your business or to sell it? All these ideas are worth thinking about whether you plan to make any or all of them come true.

Remember, everything begins with a thought. So take the time and energy to think about it and create a plan.

To fix your company, you need to start with a 360 degree impartial assessment of what is and isn’t working at your company today, what you are going to do about it in the coming year and in the next 3 to 5 years. It’s a combination of short-term planning and long-term planning that are in synch with one another.

Once you have the lists in place, you must whittle it down to your Top Five and work on those each week. This is one key step in how you make progress on fixing your business.

The best way to grow your company is through smart acquisition. My company was skyrocketed by the consistent use of key acquisitions. And now my clients have been using these same time-tested tools. Acquisition is simply the best marketing dollar you can spend because it’s getting you real customers trained to call a number when they need contracting services vs. traditional marketing that is more of a hope that it will actually get people to call you. Like all things worth doing….you need to know how to do it right.

One piece of the acquisition puzzle is how to figure out what to pay for a company. Here’s the cool thing….the valuation process works whether you’re looking to buy a company or sell your company.

The following is a tiny excerpt of one of the many forms and templates in the copyrighted program called Get More Calls Now:

Note you can search the internet for “valuing a business”  Know that your understanding of these methods is NOT essential for buying companies.  Understanding the basic vocabulary can help you feel more confident at the negotiating table or working with a business broker. Don’t be intimidated.  After all…a company is only worth what someone will pay for it.  The following is only a guideline use your own trusted advisor if you choose to implement this strategy.

Earnings methods

Earnings means profits or net income.  One way to value a company is to consider what future earnings could be realized from this company and pay the seller accordingly.  The acronym EBIT or EBITDA is used in this kind of valuation.

• Earnings
• Before
• Interest
• Taxes
• Depreciation
• Amortization

This valuation takes the company’s profits, often averaged over 3-5 years, and adds back in Interest, Taxes, Depreciation and Amortization.  These items are added back in because the new merged entity may have a significantly different debt basis and or tax implications.  And Depreciation and Amortization are non-cash expenses, and the impact may be greatly different in the merged company.  In a company where Depreciation is a significant expense – a service business with lots of vehicles – you might look at EBIT and not EBITDA.

If the owner takes out a salary that doesn’t need to be replaced after the sale, sometimes that is added back in.  Other ‘perks’ may be added back in.  These are called “add-backs.”

Once you calculate the earnings, the selling price can be a multiple of earnings.  Is there a common multiplier?  You will hear multipliers from 2 to 10 times earnings.  If a consolidator is buying several companies in their market, they may establish what they will use as a multiplier.  However, the price of a company is what someone will pay for it.

And example:

EBITDA = $100,000 (average of 3 years)

If the multiplier is 3x earnings, the selling price of the business is $300,000.  This can be paid over time…in cash…or in a combination of cash and stock in the purchasing company.

Here is a list of the most popular valuation methods.

• Cost-based approaches
• Book value
• Adjusted book value
• Liquidation value
• Market approaches using comparables
• Price to earnings
• Price to pretax earnings
• Price to cash flow
• Price to book value
• Income approaches
• Capitalization of earnings
• Excess earnings methods
• Discounted future earnings
• Discounted future cash flow

There are a lot more details about how to value a business than this little excerpt but this will get your started whether it’s how to look at a company you’re looking to acquire or you’re trying to affix a value to your own company to sell it.

I had no real job description other than to do everything and be quick.

That meant my typical day could consist of running for truck parts all over New York City and the Greater Tri-State area, running service calls, running sales calls, attending additional technical training classes at night and a whole lot more.

I prided myself on how productive I was by how many things I could do at once.

When I reached the ripe old age of 30, I told my dad, “I can’t do as much as I did when I was 22.” And then I listed off all the stuff I used to be able to do like above.

Pop chuckled. Then, he smiled and said, “Well, you really weren’t that good at anything you did! Now that you actually know what you’re doing, you’re digging in more and actually getting more done right. You used to waste time fixing errors you made!”

Oh that hurt…for about a minute. Then, I realized it was sort of a compliment too.

Like always, he was right. It was only because I had learned more about what I was doing in every phase and put concentrated effort into things that I could actually get more things done right the first time vs. more things done half right if not downright wrong.

There is the illusion that a lot of people have but we as owners have it more so than most and that is we can successfully multitask. I know because I prided myself about my ability to multitask through my early years.

Hey, I need to do that…right?

You know what I mean. There are customers and staff tossing balls into the air and expecting you to effectively juggle them all. That is until too many balls are in the air and then things come crashing to the ground.

It’s been proven over and over in studies and prestigious institutions that study this that our minds can’t be as productive and effective when we try to multitask vs. spending concentrated time on one thing at a time. It only feels like we’re getting more things done when we multitask.

To this point, I was just reading a great book called, Sleights of Mind: What the Neuroscience of Magic Reveals about Our Everyday Deceptions by Stephen L. Macknik, Susana Martinez-Conde and Sandra Blakeslee.

Don’t let the long title and the word neuroscience put you off. To me, it speaks elegantly about how we’re hard wired and how we function [or don’t function].

It covers a lot about things related to what we think is happening vs. what is really happening. Just one of the takeaways from this book is that thinking multitasking is being productive is just a myth.

Why believe a myth?

It feels good and it creates the illusion we want, especially as owners. And that is that we, the best the company has to offer, are mentally superior to others and that we can get far more done in less time.

Want more proof that multitasking is actually non-productive especially over the long run?

Look at what’s going on when people are driving today. We’re eating, drinking, talking on our cell phones and more crazy stuff that’s downright dangerous. If you want to see the craziness take a tour on YouTube or look out your windshield and pay attention long enough. Does multitasking make us better drivers…no…it doesn’t!

Focusing on one thing over a concentrated time may seem like it’s impossible for you but I’ve trained people at multiple companies how to do it and they are at some of the busiest shops in the country.

The first thing I teach them is you must know where you’re day is going. I teach them to use a time-tracking sheet.

What they learn to do is what you must learn to do and that is to prioritize you day hour by hour. Then, increase your effectiveness by working on the right thing, in the right way at the right time. When you learn how to do this, you’re effectiveness will skyrocket.

Like all new habits, it’ll require discipline and practice. Start small by prioritizing your to-do list for work each morning and then learn how to block your calendar into two-hour blocks. Even if things come up that are unplanned for you can still get back on track. Also, don’t beat yourself up if you can’t master this right away. Set a modest goal of working on this prioritization and time blocking so that in a couple of weeks you’re doing it 3 out of 5 days a week.

If you want to see what a Time-Tracking Sheet looks like, email me at al@appleseedbusiness.com and I’ll be happy to send it along. It’s what taught me how to make the best use of my time hour by hour.

I think pursuing perfection can be a healthy thing.

I know that demanding perfection of yourself and others is not a good thing at all.

Why do I know that? I lived a life of demanding perfection for too long in my own life and my own business career.

Demanding perfection can paralyze you. That because nothing can ever be done well enough for you. The evil temptation than becomes to never do anything new or create programs that never get off the ground. The company slowly strangles itself. And the only ideas deemed worthy are from the perfectionist so it stifles the staff and the company once again.

The staff becomes disinterested in taking any initiative if you’re an uncompromising perfectionist. Why bother if taking initiative only gets you grief. Whatever you suggest or do will be seen as “half baked” and never good enough to please you.

The worse trap is that you begin to believe that only you can do things the right way so delegating and engaging your employees in problem solving is never an option. And the myth continues to grow.

What does demanding perfection do to you? It can become isolating. It can wreck your health and destroy your business. All the opposite of what you probably desired when you latched on to the concept that only perfection will do. In extreme cases where the demon of perfectionism goes unchecked, it can cost you your life!

Know that it can be a wide spectrum of demanding perfection. Sometimes it’s small and sometimes it’s all consuming. Know too that a little bit of perfectionism rarely stays small. It grows like a cancer if unchecked.

A rampant form of destructive perfectionism is procrastination. The need to stall everything has at its core the unwillingness to do anything new or start a new project or program because you feel it’s never perfect enough…it just needs more time. And that time never seems to arrive because perfect can never be achieved. It’s a mirage.  It’s never going to be perfect from the start and it’s never going to stay perfect forever.

Stuff happens!

When I realized the damage I was doing to myself, to my co-workers and my company, here’s what I learned to say, “Good enough for today. We’ll make it better tomorrow”

What a relief!

Here’s what I learned to do instead:

1. Brainstorm ideas with the team
2. Work through the best of the ideas together
3. Create a step by step plan for each good idea
4. Create measurable goals and milestones along the way so we would  know when to make adjustments
5. Have a timeline when it gets released

If you don’t do this, I promise you your projects will never get off the ground and you’ll awake to the same things that plagued you and your company yesterday. And you’ll be facing that same thing tomorrow.

Interestingly enough, many of my new clients are afflicted with the “Perfectionism Disease.” The curious thing about that is things tend to be anything but perfect at their companies or why would they be asking for my help. They know it’s broken and it needs fixing. The tough thing is that they owner needs fixing if they allow the Perfection Monster to continue to rule their companies.

Once you move from demanding perfection to pursuing perfection, your company can become a fun and productive place to work. And you and everyone who works for you will be a lot healthier for it.

I have witnessed at the companies I’ve worked for over time staff members who were chain smokers and overweight take control of these bad habits and live a healthier life. That’s because the stress and tension of perfectionism has abated. They become less hard on themselves and actually gain the control they always demanded but that eluded them.

Pursuing perfection vs. demanding perfection doesn’t mean you have to drop your standards. It means you can raise your standards by doing it in a more rational way that includes doable small consistent steps that get you to your objective goal a happier person.

My wife dropped me off at the airport and as we were saying goodbye casually added, “Why don’t you get your shoes shined before you fly?”

Okay, they weren’t caked with mud or really super dirty but they weren’t shined up like they should have been. I do have a shoe shine kit and I tend to be pretty good about it but I was slacking. I’ve got no other defense.

Anyway, with time on my hands, shoes on my feet needing some gussying up I knew exactly where to head. There is a shoe shine station right next to my usual stop at the airport….Starbucks. I, like the planes I fly, should never fly without fueling up first!

I’ll admit it. The whole shoe shine thing is kind of a showoff thing to me. I mean they put you way up on a big chair and you look down as people are rushing through the airport. It’s a bit ostentatious to be seated on this lofty perch. That’s why I normally stare down at my shoes and avoid eye contact with those passing by.

Finally, it was my turn and up into the chair I went. Instantly the person shining my shoes (a 20-something and a bundle of energy) engaged me in conversation and he went about his work. He was sporting a smile that was ear to ear as his hands were a steady blur of activity.

At first, he was asking me questions about where I was heading and what I do for work. Then when I was finished, I asked him, “How long have you been working here?”

He replied, “I’ve been working here for two years. That’s when I finished my time at a boarding school. I was lucky that my dad did the very difficult thing and put me into this tough school so I’d find some structure and discipline in my life. I was totally out of control and heading down a dangerous road. I know it was really hard on him to send me, his only son, away like that and I thank him every day for doing it.”

He continued, “You see I come from an alcoholic family and my life was going down the bottle if I didn’t stop what I was doing. The school became like the family I never had. They gave me tough love and set me up with this great career. I can work as long and as hard as I want and I’m free to be me when I work. What could be better?”

I had no answer other than to say, “I’m so very pleased for you. You are indeed a master of your own destiny and you have chosen a new path for yourself and found the courage to walk that path rather than falling victim to your early trials and tribulations.”

He never stopped polishing and buffing my shoes for 15 minutes. It took that long because I wear size 13 shoes so there’s a lot of area to cover! All of this…while he was enthusiastically sharing his story about his life and career path.

I share this story with you because it reminds me of the many people who came to join my family business in New York during my working career. Not all of us were “choir boys” and plenty of folks had struggled early in their life before coming to work with us. What it made me realize early on in my business career is that life can indeed present 2^nd and even 3^rd acts if we so deem it to be possible. Many of the young hires I made over those years shared that what they loved most was that we provided them structure, a career and a future that was much brighter than their current course had them headed to and that we cared about them as people.

What I also realized is that most of us want to belong to something. Maybe it’s because it can be the family we never had when we were growing up. Or, maybe we want to find a business family like the family we grew up in a positive way. Whatever the case, make no mistake about it….business is like family. The owners can be like parents and the managers can be like big brothers and sisters even if we’re not related by blood.

So, what kind of family structure is your business creating? How much do you go out of your way to recognize and reward good behavior? How much of a career path are you creating for those who have chosen to join your team?

Choose to provide structure, discipline and true affection for those who work with you not just for you and watch your business family flourish!

Pam and I have always talked about business since she was a teenager because she shares my love for it. We both get that love of business from my dad.

I asked how her recruiting visits around the State of Arizona was going and she shared that the turnout was huge. She also shared that she had some great recruiting sessions. The bonus is those who showed up for the most part were very-well prepared for their interview session with her.

I asked what she meant by that and she explained that they exchange emails before the interview takes place, she has them read her blogs before they arrive for their interview and she instructs them to view a special 10 minute video about camp life and the camp experience so those being interviewed can know what to expect.

My wife and I were curious so she played the video on her computer for us.

I know I’m biased…but…it was brilliant!

The video is of her and the two other directors speaking to the camera as they gave a flyover tour of the camp mixed in with both the great things about camp and what the applicant must do to earn a coveted spot at her camp because winning a position at their camp is very coveted.

What I realized in that moment is that unlike most contractors who are desperate when they hire and put little thinking and effort into the process of screening who is coming to potentially work for them they end up being interviewed by the  candidates rather than do the interviewing of them instead. Not Pam!

She was in control of the whole process and was interviewing them because they were applying for a job from her and her team.

Hey, I never thought about telling a prospective hire to view a pre-recorded video message when I was a contractor. But think about it. It builds interest and desire to joining your team because you only want the right stuff people. This video idea is a great way to tell them what they’ll encounter in the real-world at your company, the opportunities for a career and not just a job and what they can expect. A great video would be attracting the right candidates while repelling the wrong ones. It’s a little bit of the feather and a little bit of the brick.

She also let us know that there’s a twist in that the perspective hire must view the entire video all the way to the end because it tells them to show up at the interview and do an enthusiastic presentation of what is said at the end. It’s top secret so I can’t share it with you!

Wow! Imagine recruits having to come to your interview sessions prepared and engaged! The right type of potential hire will watch it and it’ll build buzz about the process and the organization they’re seeking to be a part of. It prescreens them and tests them to see if they invested the time and energy to watch and learn from it.

One more tip from Pam is that after she gets a pile of applications, she sorts them into three categories:

1. Group A: These are the winners she wants on her team. Their enthusiasm, spirit and intelligence have convinced her they’d be a real asset
2. Group B: These are good people but not quite sure how they’d fit in and although a potential asset they’re in 2^nd place to the Group A candidates. She keeps them engaged because she knows that she may not get all the Group A candidates she wants and needs. Stuff happens!
3. Group C: These are people who are not going to make the cut. She is courteous to all of them because she knows it’s the right thing to do. She leaves them knowing they were good candidates and it was a difficult choice but because of the numbers squeeze they didn’t make the final cut and she’s contacting them as soon as possible so they can make other  plans for the summer.

To me, Pam has mastered the concept that recruiting is a lot like marketing and that means you have to build buzz and fill the funnel bigger than you need so you can be selective in the hiring process.

Do as I did. Take a staffing lesson from my kid because you’ll be glad you did!

I made the most of my time on Long Island not just by visiting my brothers and my nephew who are still keeping Long Islanders warm in winter, cool in summer and the plumbing fixtures working and flowing.

I also used the opportunity of being on Long Island to catch up with my good friend and mentor, Dan Holohan. As we sat at a diner catching up over breakfast like we did for so many years when I was working in the field and Dan was my co-pilot heading off to find cool stuff to troubleshoot together.

Once the questions about the family were out of the way we began to discuss where we both see the industry trending in the years ahead.

It was a spirited give and take as always and I always come away a smarter man for having talked with and more importantly listened to Dan.

I began, “Dan, I remember leaving the business back in 2000 and being promised that equipment would be so smart it would call us up when it was getting ready to break down or just when it knew it was due for service. Sort of like the movie 2001 Space Odyssey but a lot less onerous.

Even back then I was working on sophisticated commercial controls that could allow me to monitor the temperature remotely in a bunch of building and even how efficiently equipment was working.

I see it’s worked its way to the home automation but it seems to me there’s a way to go to really own a significant place in the mainstream residential marketplace”

Dan replied, “With tight budgets, young buyers of homes today are making tough decisions on how much they want to invest in the bells and whistles of a high-end system so although the technology is there it’s not making its way to the field as much as would be hoped for. There is a much greater need for an economical system that is more customer friendly and in my reading I’m seeing that people and companies from outside our industry namely the technology sector are jumping in to our business and are getting positioned to pose a real threat to those manufacturers not taking the threat seriously and to contractors who want to stick their head in the sand.”

I asked, “What are the implications of this new trend as you see it?”

Dan continued, “They may just cut out the traditional manufacturers and service providers by going directly to the end user and connecting with them in a way that shows they’re more attuned to what it takes to make heating systems and a lot more as much a turnkey system as they have done to our smart phones and computers!”

I paused to take it all in and then replied, “The way I see it the contractors and technicians of today may become extinct if they dig their heels in too deep and are not responsive to these changes coming downstream. To me, those who invest in building real-world training centers and positioning their companies and their staff to be able to serve the newer high-end technology have a future. Those who want things to never change and be more simplified may end up going the way of the dinosaur but they won’t know they’re the dinosaur till it’s too late.”

We both sipped at our coffees to consider what we had been discussing and appreciated that we are both seeing the same trend from a slightly different angle within the industry based on what we both do today.

Here’s what we both agreed upon. Some smart contractors will get ahead of the curve and embrace the changes. They are already on the “Green Curve” and they are getting tied into the Home Energy Solution marketplace. They are already serving their clients by being their Total Solution Provider.

Those contractors who don’t invest the time, energy and money to learn and master the higher levels of technology will be left to snap up the scraps and be in a low bidder war for the foreseeable future.

So, what’s it going to be for you, you company and your staff who entrusts you to keep them gainfully employed?

Pretty bold statement!

It needs to be. I want you fired up about taking back your company from the jaws of defeat and get it headed in the direction of success.

Here are just 7 reasons your company might need to engineer a turnaround:

1. There’s been a change in the leadership.

   Note: There are new family members either entering the business or exiting. The business might have been sold and existing management is gone or needs to go.

2. There’s no clear leadership.

   Note: There’s infighting as to who should take the lead resulting in a rudderless corporate ship adrift. Without a clear leader, power struggles take hold and that will strangle any company.

3. The business sector you’re in is no longer viable.

   Note: If what you’re doing and how you’re doing it are no longer relevant to the marketplace [the end user], you have to shift to what it is you do or you too risk becoming like the once might Kodak™ now in Chapter 11.

4. The business sector you’re in has become too competitive and/or too crowded.

   Note: You can still be relevant but if there’s not enough demand to support all the players competing to sell those products and services you may need to reinvent your company.

5. You’re  putting yourself and your family deeper into debt every day.

   Note: If you’re ignoring the financial basics of creating more assets than liabilities, time is running out. You must cut expenses now, and sometimes it will mean ruthless cutting to save the “patient”.

6. You’ve been slowly killing the “golden goose”.

   Note:  If you’ve been pulling too much money out of the company without enough consideration to how it is robbing the company of future growth and potential cash dangers, you’re standing on very treacherous ground. Remember, it’s always easier to leave the money in the business than to take it out and have to put it back in. Setup a cash reserve based on a percentage of sales and have the discipline to leave it there for future growth and a “rainy day.”

7. You’ve expanded into too many businesses you had no business being in.

   Note: It’s easy to get sucked into taking on new businesses and trades because you feel you have the overall structure to support it or you just got bored with your core business. There are a host of reasons why we stray too far. But, without clear market research, a plan for entering the marketplace, the systems and support, this strategy is bound to lead you away from your core business and you’ll end up ignoring the “golden goose” at your own peril.

With over 10 years of helping companies re-engineer themselves and pull back from going over the financial cliff, I’m pleased to say that when ownership knuckled down to the task at hand the results were far and away positive for everyone. It’s not an easy path and having a “trail guide” with experience is not a luxury it’s a necessity.

Here’s a classic approach to engineering a turnaround:

1. Recapitalize the company by slashing the amount of money you take out of the company. Use cash to take out non-performing ownership so all who are left have a stake in the game and are willing to do what it takes to take this time-tested hard trail to a successful conclusion.
2. Seek to renegotiate existing debt with vendors for either longer payouts, lower interest rates or whatever other tactics you need to employ that benefit both you and the vendor. The fact is you defaulting on what you owe is a bad thing for all. This needs to be viewed as a “partnership” process for all concerned.
3. Separate expenses into two simple columns. One is must have and the other column is nice to have. Then, take a hatchet to the appropriate expenses.
4. Build cash by selling underperforming businesses and hard assets like trucks and inventory as necessary. Most times, becoming a smaller company that is profitable is far superior to the allure of being a bigger company with no profits or losses. Get your ego out of the way. Here’s the cool thing….you can grow again but this time in a smarter way!
5. You can’t cut yourself to health. You must also restructure the company by shifting resources to new, value-added product lines [ex: green products and services] that utilize your company’s core expertise and help you develop a desired niche.
6. Spend your marketing dollars wisely by energizing targeted acquisitions that strengthen the new corporate direction. Acquisition done the right way is the surest way to build calls fast. That’s because you’re buying real calls vs. marketing alone which is a hope it will result in calls. Plus, you take out competitors in your marketplace which can create room to raise prices as you build heft. If you can shut down a competitor and put their company under your roof, you can make more money with their current sales than they could ever do as a stand-alone company bearing the burden of redundant expenses.

Engineer a turnaround at your company and reap the rewards!

Finally, I’d be out of crisis mode and problem solving. At least, that was the plan.

But invariably at 5 O’clock another kind of interruption would happen. A staff member would be knocking on the doorframe [I had an open door policy] and asking me, “Got a minute?”

Based on the time of the day and the pressure in their voice, I already knew that I was about to be taken hostage.

What did they want a minute of my time to talk about after the official end of their workday? Well, at that time of day, it was to either let me know they had another job offer or to ask me for a raise so they could stay.

What time of year did the 5 O’clock knock happen most? You guessed it…our busiest times.

I was now forced into playing defense and trying to talk the employee into not jumping ship so I’d have to sweeten the deal to keep them. Most often that meant overpaying them to keep them onboard. And when this would occur I would feel like a hostage. I hated feeling like a hostage but at that point in my business career I didn’t know how to be proactive. So, I caved more times than not.

Sound familiar?

And once an employee knows they can hold you hostage they will be back again.

Frankly, I was angry at them. But over time, I came to realize it wasn’t their fault. I had never defined how someone moves ahead and makes more money at our company. I had never even considered what it was like for them to have to come and ask me for a raise as if I was there dad and they wanted a hike in their allowance. When, I pulled myself away from the anger and saw it from their perspective, I realized this arbitrary process of getting a raise was bad for me and bad for them.

That’s when I set about to create a fairer system in which it was based on objective demonstrated performance that was tied to Salary Levels that matched our Organizational Chart. It defined in writing for all to know how you moved up the ladder and how you could make more money. Later on, the extra sweetener was the opportunity to sell more things and make more money.

Having Salary Levels even helped me hire better. Now, I could sit with in a hiring  interview with a new candidate and share with them where they could go in the future and how they could make more money with us. It was the first time I didn’t let these potential staff members force me into overpaying them at the expense of my own staff because I was being oversold on what they could really do.

The hiring conversation became more like, “We don’t know where to place you along our Salary Levels so over the next 90 days we will be doing both in-house testing and real-world testing to see where you fit. Know that this system will ultimately let you make more money as you demonstrate you’re worth it. We will even help you get better because it’s in everyone’s best interest. You will never need to guess or hope a raise is coming…you’ll know!”

Give your employees a system that addresses their “WIIFMs.”

Remember, good policies and procedures known by everyone at your company will also help people be effective at your company and demonstrate they’re worthy of more money as they prove they’re more productive. Good policies and procedures are designed to empower people to handle what comes up 80% of the time successfully.

Think positively about your staff and yes, even learn how to love them…then…create a fair set of rules to play buy and make sure they get a voice in how you do your work. This is what builds buy-in and longevity at your company. Ultimately, everyone will win.